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Group: State fails financial transparency test

In a state where there’s plenty of sun, Arizona’s government doesn’t shine much light on how it uses public money.

Arizona received an “F” when it came to openness about government spending, according to a report by Arizona Public Interest Research Group.

Arizona, along with about three dozen other states, makes spending data available on its websites for residents to access. But it doesn’t provide the same level of detail as some other states.

Kentucky, for example, provides detailed information on government contracts. It shows a summary of expenditures, as well as the actual contracts. Illinois has a portal devoted to financial incentives. That database shows the recipients of tax subsidies or development grants and even the number of jobs created by the allocation.

The report unveiled April 13 said this level of analysis allows residents to determine whether tax subsidies and economic development incentives are effective.

“The greatest medicine is sunshine and we need sunshine on state government. We need sunshine on local government,” said Sen. Russell Pearce, a Mesa Republican. “You have a right to know how every penny is being spent.”

In fact, the Legislature passed a law in 2008 requiring the Arizona Department of Administration to establish a searchable database by January showing money that agencies receive and spend.

PIRG did not consider this law in its report since the website is not yet operational.

“The good news in this report is that states that have robust transparency websites are saving money, are restoring public confidence in government, and are also preventing the misspending of hard-earned taxpayer money all with little upfront cost,” Diane Brown, PIRG’s executive director said in a press briefing. “The bad news is that Arizona received an ‘F’… because as of yet we do not have a comprehensive state website up for Arizona citizens to know where their money is being spent.”

Byron Schlomach, an economist with the Goldwater Institute, said a transparent government is responsive, open, accountable and honest.

“Arizona is behind the times when it comes to financial transparency, but fortunately we have leaders, some of whom are with us, who are determined to see that Arizona catches up,” he said.

Schlomach was referring to past and ongoing efforts to put the spotlight on government expenditures.

A bill introduced by Litchfield Park Republican Rep. Steve Montenegro, for example, requires local government entities to create their own websites that would detail revenues and expenditures of over $5,000.

Additionally, H2282 would require the Department of Administration to cross-link expenditures associated with government contracts to the actual language of those contracts.

The measure has passed out of the Appropriations Committee and is awaiting debate and a vote on the Senate floor.

But some Republican senators have plenty of questions.

In a recent GOP caucus, Sen. Linda Gray, a Republican from Glendale, wanted to find out where the money to implement the bill would come from.

Sen. Carolyn Allen, a Scottsdale Republican, also asked if there was a fiscal report on the bill. Sen. Barbara Leff, a Republican from Surprise, raised concerns about the bill’s requirement for local entities to cross-link websites, as those websites may not all be compatible.

Pearce, who is advocating for the measure in his chamber, said the cost estimates of establishing and maintaining those websites are exaggerated.

A fiscal note prepared by the non-partisan Joint Legislative Budget Committee shows that the cost to ADOA to implement the measure is least $100,000.

College districts estimated that their total costs stands at $5.4 million for the first year. The League of Cities and Towns said it would cost a representative sample of municipalities about $1.5 million. Meanwhile, the Arizona Association of School Business Officials estimated that it would cost the large school districts more than $50,000 each.

The Treasurer’s Office operates azcheckbook.com, a searchable database of agency revenues and expenditures at a much lower cost. The Treasurer’s website cost $13,000 to create and is estimated to require $1,100 in annual operating expenses.

Also, the fiscal analysis noted that Texas, which implemented a transparency database, saved $4.8 million over two years.

When asked during a press briefing where the money would come from to implement his bill, Montenegro said the figures are “irrelevant.”

“We are talking about telling people and sharing with them and being open with them as to where their money is going,” he said, adding he doesn’t agree with the estimates because other states have implemented similar programs at no cost.

“They’re collecting millions and millions of dollars in taxes. Fifty-thousand dollars to show the public where that money is being spent is just not an argument,” he said.

Pearce argued now is the best time for such a program, when the state is facing economic difficulty.

“What a better time to make sure that we’re not wasting money. What a better time to make sure that we’re holding people accountable,” Pearce said. “We’re talking about no money for this and no money for that. Well, let us find out where they are spending their money.”

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